The Importance of the EU for Germany

The European Union is far more than an export market for Germany. It is a key driver of growth and a stabilising force for the economy. Our study for vbw – Vereinigung der Bayerischen Wirtschaft demonstrates the extent to which value creation, employment and economic dynamism in Germany depend on integration within the European Single Market and the open borders of the Schengen Area.

The findings leave little doubt: Germany’s economic development is closely tied to the effective functioning of the EU. The aim of the project was to examine the EU not merely as an export market, but as a comprehensive economic system. The study focuses on how European integration influences value creation, employment and economic growth in Germany, and how sensitive these factors are to changes in the European environment.

European Integration as a Foundation for Value Creation and Employment

• More than half of German exports are destined for EU member states. The Single Market is therefore Germany’s most important export destination and has recently become even more significant.
• Around 52 per cent of Germany’s exports to the EU consist of intermediate goods that are further processed within European production networks. This highlights the close integration of European value chains.
• Five key EU partner countries, namely France, the Netherlands, Poland, Italy and Austria, account for more than half of Germany’s exports within the EU.
• Demand from the EU generates around 554 billion euros in gross value added in Germany (approximately 16 per cent of the total) and supports 7.2 million jobs.
• Germany’s manufacturing sector, along with export-oriented industries such as automotive manufacturing and mechanical engineering, benefits particularly strongly from demand within the EU.
• Economic interdependence remains strongest in Western Europe. At the same time, Central and Eastern Europe as well as Northern Europe have grown in importance in recent years.
• Scenario analyses show that economic stagnation within the EU would have a greater negative impact on exports, value creation and employment in Germany than comparable developments in other regions of the world.
• Open borders within the Schengen Area ensure efficient supply chains and facilitate trade, tourism and cross-border commuting. The reintroduction of systematic border controls would cost Germany an estimated 1.5 to two billion euros per year.

Our Approach

Prognos examined Germany’s economic interdependence with the European Union through a range of key economic transmission channels. The team analysed trade structures and cross-border supply chain linkages and quantified their effects on value added and employment. In addition, it developed a series of scenarios to simulate how different economic developments within the EU could affect key macroeconomic indicators in Germany.

A particular focus was placed on the institutional foundations of European integration, including the Schengen Area. Prognos used economic modelling to assess the economic effects of these frameworks. The result is a comprehensive picture of the EU as a fundamental pillar of Germany’s economy.

Links and Download

To the study (PDF, in German)

Further information on the website of vbw

Project team: Silvia Golm, Jan Limbers, Dr Andreas Sachs, Eva Willer

Latest update: 24.08.2026